Going It Alone: Legal Mobilization And Efficacy In The Foreclosure Crisis

Abstract

In the past decade, the rate of residential foreclosure in the United States reached historic highs, with negative consequences for individuals and neighborhoods. Prior research shows that foreclosures are concentrated in economically disadvantaged and racially segregated areas, leading researchers to consider inequalities in mortgage lending, foreclosure initiation, and the administration of policy interventions. However, less attention has been afforded to the foreclosure process, despite its role as a potential source of inequality in the foreclosure crisis. This dissertation addresses this topic by investigating variation in individual homeowners' behavior within the legal foreclosure process, including their use of legal representation, and considering the implications for individual case outcomes and the foreclosure process more broadly. Focusing on the judicial foreclosure process in New York State, I use a dataset of a representative random sample of foreclosure cases initiated in New York City between 2007 and 2011 to address three topics. First, I assess whether the empirical realities of the foreclosure process-specifically, the behavior of lenders, their lawyers, and homeowners-support assumptions embedded within the laws governing foreclosure. I find evidence that contradicts these assumptions, documenting a gap between the law on the books and law in action that has significant consequences for homeowners, the land title system, and the legitimacy of the legal system and the legal profession. I then consider how homeowners' responses to civil actions to foreclose vary, and assess the consequences of these actions. I not only document patterns of behavior among homeowners facing foreclosure, which are associated with case outcomes, but develop a conceptual framework for analyzing the dispute processing behavior of individuals who must respond to a legal claim. Finally, I focus specifically on the use of legal representation among homeowners. I find that cases where the homeowner was represented are less likely to result in foreclosure, but that this association is diminished after accounting for procedural reforms to the foreclosure process. The results of these analyses have important implications not only for the foreclosure context, but also for our understanding of dispute processing, inequality in the law, and the role of the legal profession.